Hidden Costs of Facebook (online exclusive)

Facebook is one of the country’s largest, most profitable companies. However, the social networking juggernaut is currently facing several issues that affect its profitability and overall image.

For one, Facebook is bumming us out. That’s according to a recent study by psychologists at Stanford University, which found that frequent Facebook visitors tend to overestimate the happiness and well-being of the people on their friends list; this inflated perception has led many users to feel lonely and depressed. However, the study also shows that employees who are able to access Facebook at work are generally happier; last year, 10 percent of American companies noted improved morale among their workforce as a result of unrestricted web-browsing capabilities.

Facebook has improved its eco-friendliness since 2010, when plans to build a coal-powered facility in Oregon were met with widespread protests from environmental advocates. The following year, Facebook teamed with The Climate Corporation to develop guidelines for building greener data centers with a reduced carbon footprint.

Finally, the company has struggled to update its books in terms of smart technology. Facebook boasts more than 1 billion registered users, and more than a quarter of them log in to the site at least five times daily. However, nearly half of these account holders use mobile devices to access their Facebook page – and until now, the company has been unable to monetize smartphone and tablet device users. Due to this shortcoming, the company made roughly $1 billion less than expected last year.

To learn more about aspects of Facebook related to health, environmental issues, and the economy, please check out the latest video from the Hidden Costs Series.

Video Transcript:

Health: CStanford’s psychology department says: Facebook users reliably overestimate other people’s happiness, and therefore are more depressed about their own lives – a problem plaguing women more so than men. On the flip side however, access to Facebook at work makes employees happier, and each year about 10% of companies allow browsing to improve employee morale.

Environment: C+In 2010 Facebook announced it would be building a coal-operated data center in Oregon– but after environmental agencies came down hard on the social networking site, Facebook made some changes. In 2011, Facebook linked up with Climate Corp to produce data centers with a lighter footprint and in time hopefully their data centers will be more eco-wise.

Economy: C+With over a billion active users and nearly a quarter of them visiting 5 times a day it’s no wonder Facebook made $5 billion dollars last year. But with 488 million of these users navigating via mobile devices and with Facebook struggling to monetize mobile, it’s also no surprise that Facebook made about a $1 billion less than expected.